A blog about creating value in your organization through supply chain excellence
by Jim Tompkins, CEO & President, Tompkins International, supply chain consulting

Sheetz Expands with New Distribution Center

truck revI love to watch as our clients grow and expand, particularly those we have worked with for several years.

Sheetz Inc., the popular gas station and convenience store chain, announced last year its plans to build a manufacturing and distribution center in Burlington, North Carolina. They officially broke ground last summer.

In spring 2011, Tompkins conducted research for building the new site, as well as the network analysis and strategic campus design. We are proud to have been a part of this important new facility, and we are excited for the start-up and go-live phases of the operation. Learn about some of our past work with Sheetz here.

This recent Times-News article describes the campus design, which will include a Sheetz Bros. Kitchen bakery, distribution and warehousing center for the Sheetz distribution fleet, and offer space for various other corporate support departments. Supplies are currently transported from Sheetz’s sole distribution center located in Pennsylvania, but the new facility will allow sustained growth while continuing to ensure delivery of fresh goods at a lower cost.

The $32.8 million facility is expected to be occupied by August 2015, according to reports. Congratulations, Sheetz!

Best,

Jim

More Resources

Warehousing, Distribution, and Fulfillment

Tompkins International Client Success Stories

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If Customers Find E-Commerce Experiences ‘Uninspiring’, Check Your Supply Chain for Remedies

4936790096_0584c4d6e4_mI don’t know much about filters or “discovery experiences” as they relate to e-commerce, but an article published on RetailWire the other day caught my attention.

In a recent study of shopping experiences on top retail sites, Compare Metrics and the e-tailing group concluded that most participants find their current shopping experiences “uninspiring.”

How can this be? How can purchasing anything one desires from the comfort of his or her couch be uninspiring?  And how does this relate to supply chains? It all boils down to the customer experience and how it relates to e-commerce. Innovations that benefit consumers, such as same-day delivery or customized ordering and delivery methods, help personalize customer experience.

Obviously, personalized customer experience is what’s missing here. And it can be remedied by a supply chain that is flexible enough to meet changing customer demands. If you have an inflexible, cookie-cutter supply chain backing your e-commerce efforts, then customer experiences are more likely to be “uninspiring.”

If you have a distribution facility that can only serve one channel, then you will be challenged to effectively meet the needs of today’s multichannel consumers. If your operations are not demand-driven, then you will struggle to keep up in a complex retail environment where customer expectations change as quickly as new technologies take hold.

What are your customers saying about their online shopping experiences? I’d be interested in hearing how your supply chain and fulfillment operations are changing to meet new demands.

More Resources

Article: Personalized Multichannel Logistics: Moving Beyond Traditional Distribution and Fulfillment Centers

Video: The NEW Demand-Driven Operations

Case Study: Growing E-commerce Company Seeks Distribution and Network Plan

Photo Credit: Michael

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A Game-Changer for the Transportation Industry

transportation3Estimates from the 2013 holiday season suggest that 33-40% of seasonal shopping was done online. While the numbers for the rest of the year are not nearly that high, online shopping is clearly growing at an unstoppable rate.

But I bet you are wondering why I am still talking about last year’s holiday season—in April? It’s because holiday 2013 was all about final mile delivery, and a number of issues suggest that the transportation industry’s innovation is about to be tested in final mile delivery.

Manufacturers are increasingly selling their products direct-to-consumer, which means more companies are looking for specialized transportation services. The online grocery business is also becoming more popular. But there is a problem (or challenge): the traditional parcel delivery model limits these trends from growing.

In order to keep online retail sales on the rise, companies need networks that can deliver packages to a variety of different mediums. From lockers at convenience stores, to the grocery store for customer pick-up, the transportation industry will need to showcase its ability to reroute packages to new locales or change delivery times if needed. Companies like FedEx and UPS have already begun strong marketing campaigns around this, and it’s critical that shippers also jump on board in the coming months. This is going to be a huge game-changer.

There are other game-changers for 2014-15 as well. Explore this and other hot transportation trends by downloading Trends in the Transportation Industry, a new thought-provoking report by Tompkins Supply Chain Consortium.

And I’d enjoy hearing about your transportation challenges. How are your operations being tested by final mile delivery?

Best,

Jim

More Resources

In the News: What’s Happening with Intermodal?

Does Your Company Make Effective Use of its Transportation Management System?

Final Mile Customer Delivery: Consumer Products Companies Are in Action

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Supply Chain Network Design: Is There Really a Blueprint for Success?

Dale-Pickett-2

Dale Pickett
Director, Supply Chain Consulting

By Dale Pickett
Director, Supply Chain Consulting

Supply chain optimization, like lifestyle changes, do not happen overnight. They are ongoing processes marked by continuous improvement and a few ups and downs. But in both situations, it’s essential to have a blueprint for success.

I recently had the pleasure of participating with Supply Chain Management Review in a webcast called “A Blueprint for Supply Chain Optimization.” It covers the steps to take before embarking on a network design and how it’s really a process instead of a project. Ensuring flexibility is so important to meet the expectations of today’s omnichannel customers – as is the right technology and modeling.

If you missed the February webcast, you can still catch it on-demand here.

Judging by some of the follow-up questions I received from attendees, they are taking a serious look at their own blueprints for supply chain optimization. Here’s a few of the most interesting questions and answers.

Q: “How are the models taking into consideration government policy changes such as the Affordable Care Act?”

A:  With the Affordable Care Act, you could see an impact to the cost of driver labor, which is an input not a model constraint. One option is to apply a stair-step approach with the labor component you are modeling. A second option is to apply limited resources at one cost and then more expensive at a different cost. But this will likely result in some driving volume to use all of the lower labor costs. So please make sure you have a stable model prior to this run being incorporated. Remember that the model is a strategic direction – and that process and complementing the model to incorporate will yield the best results.

Q: “Are you using cloud-based supply chain collaboration/visibility software?”

A: Yes, but in order to really benefit from cloud-based tools, you must consider a couple of constraints. First, do you need to allow the cloud to run the model because it is too large for a PC-based tool to handle? Second, should you purchase the software as a long-term planning tool?  If you purchase the software, you can set it up to fully incorporate the power of the cloud to link to files from a global basis and to allow for information to be refreshed continuously, thus starting the develop of a continuous improvement process. Both are still viable solutions that require a detailed model and people to update and run scenarios.

3770015203_9cb9aa2188_mQ: “Real execution during peak holiday periods is very messy with lots of expedites and drop-ships, etc. How can we exclude the noise to come up with an optimal model?”

A:  Instead of cleaning to get rid of the noise, have you asked how much the noise contributes to overall costs?  Is this “noise” simply the understanding of your business and what to model? Is it critical in understanding if the model timeframe should include or exclude this noise?  At a minimum, consider setting the model up on an inbound to understand how to allow a configuration to execute the model with drop ships and without. Consider doing the same with the expedited orders. And make sure the model you will be using can accomplish this task.

In most models, you should have some user-defined fields to allow for this to occur. You can also adjust service to a standard level during this period to help reduce the noise. However, fulfillment and shipping policies must be adjusted and adhered to in order to reflect controlled windows, or backorder rushes, expedites, split shipments, and so on. The key here is that all these scenarios must be modeled to reflect reality.

Are you running across similar questions in your supply chain operations? How are you updating your blueprint to meet changing customer demands?

Resources

Article: A Blueprint for Supply Chain Optimization

On-Demand Webcast: A Blueprint for Supply Chain Optimization

Distribution Operations

Photo Credit: Will Scullin

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The Final Delivery Game: Ship From Store, In-Store Pickup, or Lockers?

by Lisa Kennedy - Project Manager, Tompkins International

lego-deliveryWhich of the delivery options in the title do you think will best resonate with your customers?

Companies are offering a variety of alternatives to ease customers’ e-commerce transactions. But will retailers need to offer every option in order to be competitive? Consider this: once you lock in a consumer, is it easier from a loyalty perspective once the hook of the online order and pickup is in place?

Lockers seem to be a viable option with companies such as Newegg, GNC, PetSmart, Lord & Taylor, Neiman Marcus, Drugstore.com, and The Blue Nile Advantage. These companies have lockers that allow little to no wait time for customers to get their items. The items are stored in a place where all sales associates know where to find them and how to pick up the order (i.e., check ID, provide order number, and/or obtain signature).

On a recent Walmart visit, I found the pickup location was the same as the layaway counter in the back of the store. Two layaways later it was finally my turn, and then I had to wait another three minutes to get my package. This felt like an eternity after all the time I had to wait.

A locker seems like a viable solution, especially in areas where there is no brick and mortar. I noticed they do have lockers behind the checkout counter at a local Walgreens. The locker solution appears to have advantages in terms of easing the backend of the transaction, but is it also a solution to have lockers outside brick and mortars.

Here at Tompkins, we recommend piloting several delivery options to see which one works for your company and current operations. There may be more than one solution based on location (urban vs. rural), products, and customer demographics.

How is your company handling new customer delivery expectations? And if you are testing out options, what are you finding?

More Resources

Article: Final Delivery for Consumer Products Companies

Paper: Final Delivery: A Roadmap – Drivers and Enablers for Moving Ahead of the Competition

Case Study: Develop Growth Strategy Leveraging Regional Final Mile Delivery Capabilities

Photo By: Lydia

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How to Get the Most Out of Your Transportation Management System

tmsDoes your organization utilize a transportation management system (TMS)? If it does, are you maximizing its greatest potential? Studies show that of all the companies who can make use of a TMS, only about a third actually do so.

Today’s TMS options offer stronger payback than ever before, plus they can be operational in just three months or less. Whether you already use a TMS or are considering one, there’s new thinking on the subject that you should add to your “must read” list. “Does Your Company Make Effective Use of a Transportation Management System?is written by my colleague Gene Tyndall and makes a strong case for the value behind today’s TMS offerings.

He also reveals seven of the most important features and functions of a successful TMS. These features are important to consider because they have the potential to not only make your operation more functional, but a lot more profitable as well.

Read the article and let me know what you think in the comments below, or tweet me @jimtompkins. I think Gene is spot-on with his thoughts, but I would love to hear your questions and thoughts.

Best,

Jim

More Resources

Report – Supply Chain Technology: Applying the Latest Products and Features to Your Supply Chain

Article – Paving a Path to Become ‘Shelf-Connected’

Paper – Personalized Multichannel Logistics: Moving Supply Chains Beyond Traditional Distribution and Fulfillment Centers

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Cosmetics: The Glamour of Great Supply Chain & Logistics Strategy

6800270382_8ce32f0004_n[1]There’s some real beauty in an optimized supply chain. In a recent Inbound Logistics article, Justine Brown gets it right on the importance of effective supply chain and logistics management for cosmetic companies.

But what makes a supply chain for cosmetics different from any other industry? Most cosmetic products need specialized storage amenities such as temperature controlled environments, and even in some cases, experienced professionals with specific expertise in storing and distributing particular items. Cosmetic products are also sold in a variety of retail streams, which affects packaging for promotions and medical purposes.

Not to mention that consumers want the most popular products right away – and a smooth logistics operation is the key to achieving customer satisfaction in industries such as cosmetics.

Valerie Bonebrake, SVP here at Tompkins International, says it’s essential to know what happens to products when they leave the distribution center. “Cosmetics companies have to understand the process before they can improve it or reduce costs, and that comes down to good information management,” she notes.

I encourage you to read Brown’s column for a full explanation of how cosmetics and related companies need efficient supply chain strategy and logistics in order to get their products to market.

More Resources

3PL Consortium: Benchmarking for Profitable Growth

Video: Fulfillment Centers and E-commerce

5 Steps to Establish Outsourcing Targets

 

Photo Credit: Tasselflower

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Kudos: Kelly Reed Honored as a Supply Chain ‘Pro to Know’

Kelly Reed, EVPTompkins International

Kelly Reed, EVP
Tompkins International

I’m proud to recognize Kelly Reed, Tompkins International’s EVP of Material Handling, for his recognition as a 2014 “Pro to Know” by Supply & Demand Chain Executive. Congratulations, Kelly!

Kelly has been an authority in the supply chain industry for more than 30 years. He works with our clients to optimize and innovate their distribution, fulfillment, material handling, and systems integration—just to name a few.

Each year, Supply & Demand Chain Executive recognizes some of the industry’s top leaders with its prestigious Pros to Know Awards. The awards include two categories: Provider Pros to Know and Practitioner Pros to Know. Kelly’s recognition as a Provider Pro to Know epitomizes his resourceful collaboration with our clients to meet their significant challenges in the year ahead.

To learn more about the awards, click here. You can also read a press release here.

Best,

Jim

More Resources

Learn more about Kelly Reed in his bio

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Automated Fulfillment Systems Can Lead to Higher Payback for Distribution Operations

6059874381_fde1e711ba_b[1]Goods-to-person order fulfillment has come a long way over the years. We’ve watched it evolve since fulfillment first became automated for catalog sales back in the 1980s. Since then, we have experienced the rapid growth of e-commerce and a whole new set of customer expectations.

Today, we are seeing evolutionary progression in goods-to-person fulfillment technology, and it’s increasingly become one of the best ways your operation can gain a competitive advantage. Just download our latest paper to find out for yourself. The Evolution of Goods-to-Person Order Fulfillment: How to Meet Distribution Challenges in the Age of E-commerce explores why and how today’s new fulfillment systems offer more compact design, faster operation, and provide a much higher level of flexibility.

The paper reveals the top eight critical advantages of today’s improved systems:

  1. Operator Productivity
  2. Ergonomics
  3. Space Reduction
  4. Improved Operations

I can’t reveal all the secrets here, so to find out the other four important benefits, read the full paper.

I’m interested to hear what you think and how new technologies are working for you. How has goods-to-person order fulfillment evolved in our own operations? Let me know in the comments or tweet me @jimtompkins.

Best,

Jim

More Resources

Press Release: Tompkins International Releases New Guide to Goods-to-Person Order Fulfillment

Report: Supply Chain Technology – Applying the Latest Products and Features to Your Supply Chain

Paper: An Evolution of Crossroads: Roles Converge for Consumer Products Companies and Retailers

 

Photo by USDAgov

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Revealed: Our Top Predictions for 2014

SCB Resource GuideWhat happens when you bring together top supply chain experts and ask them to give their insights about 2014?

You get SupplyChainBrain’s 2014 Supply Chain Management Resource Guide. Each year the magazine selects supply chain leaders to submit their outlooks for the year and focus on particular industries or key operations areas. The 2014 issue featured nine experts from Tompkins International.

I’m pleased to share insights below from eight of my colleagues. You can also find my article on Facing the Titans: Build Your Offense to Compete with Amazon and Walmart, which explores how you can face the titans of retail to remain competitive in today’s market. Has your company created a counter-offensive strategy yet?

Other articles by Tompkins International:

I want to hear what you think. Find me on Twitter (@jimtompkins) and tweet me your thoughts about Tompkins’ insights for this year. Would you add anything? How will these outlooks affect your supply chain strategy?

Best,

Jim


More Resources

Video – Amazon and Walmart: Facing the Titans

Video – The Right Fulfillment Center for E-Commerce

 

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Do Companies Really Expect Their Suppliers to Be Innovative?

Bruce Tompkins

Bruce Tompkins

Guest post by Bruce Tompkins, Executive Director, Tompkins Supply Chain Consortium

This headline raises an interesting question that Tompkins Supply Chain Consortium tackled recently in a published survey on supplier scorecards for innovation. We learned that nearly 80% of companies utilize supplier scorecards to monitor and continuously improve supplier performance.

We also learned that the top three measures found in supplier scorecards are delivery (91.5%), quality (84.9%), and cost (80.2%). I wasn’t surprised by this data until I saw the percentage of companies who measure innovation. More than 38% of surveyed companies—or more than a third of the 155 companies across all industries—measured innovation on their scorecards.

When we asked how long companies have been measuring innovation, we found this be a fairly new phenomenon. Only 8.4% have been measuring innovation for more than three years.

The biggest obstacle to measuring innovation is determining a sound metric to use. Many companies have struggled to find a metric(s) that is clear and understandable. Some metrics suggested include Salesforce feedback, number of resources applied to new product development efforts, technology improvements, and surveys and data collection on innovation successes.

Another interesting finding is the number of companies who indicate that innovation influences the awarding of business. Nearly 22% of companies say innovation is a factor in awarding business, and the average weighting factor in an evaluation is about 25% for innovation.

So, what’s the big takeaway? Innovation is the real deal to many companies. If I was a supplier, knowing what I know now, I would put a strong emphasis on increasing my organization’s innovation skills.

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